Any amount helps us keep producing quality journalism for Mississippi.
Enter your email address or see our other free newsletter options.

Mississippi Today
Nonprofit Mississippi News
The Hinds County District Attorneys Office is asking a grand jury to consider new information gathered during its investigation into Nancy and Zach New, figures in Mississippi’s welfare scandal.

The state has also asked Hinds County Circuit Court Judge Faye Peterson to postpone the New case, which is set for trial on Feb. 7, to give the grand jury enough time to convene. The recent motion suggests the state expects a grand jury to hand down new criminal indictments against the News, which will likely have many parallels to the first.
Meanwhile, attorneys for the News wrote a scathing 12-page motion accusing State Auditor Shad White, who originally investigated the case, of attempting to try their case in the media.
“Auditor White’s statements went beyond the information contained in the indictments and instead amounted to character attacks and assurances that those charged were indeed guilty,” the attorneys wrote. “White’s emphasis on ‘influential people,’ ‘politically connected’ persons, and allegations of stealing from the poor for personal gain gave the story special pique and media saturation across Mississippi.”
Attorneys for another defendant in the scheme, former welfare director John Davis, made similar arguments in his case recently.
The News’ motion asks the court to suppress White from speaking to the media — even though there is already a gag order in the case — and also asks the judge to move the trial, known as a change of venue, “due to the relentless actions taken by the State Auditor to poison the jury pool.”
The auditor’s office declined to comment for this story.
A Hinds County grand jury first accused the News in 2020 of each defrauding the state and embezzling over $4 million in federal dollars their nonprofit Mississippi Community Education Center received from Mississippi Department of Human Services. A year later, a grand jury combined their charges into one case.
The News are also facing separate federal charges related to public school funds they allegedly bilked from the government for their private schools. Most recently, U.S. District Court Judge Judge Carlton Reeves set trial in that case for May 9.
The state criminal charges address just a fraction of a sprawling alleged scheme that resulted in $70 million wasted or misspent, according to auditors. Though the money was supposed to help the poor and prevent poverty, much of it enriched the friends and families of powerful officials.

Trending

Most Common QR Activation Code 001-$wag$-sfap49glta4b7hwyl5fsq-3802622129

In October, a forensic audit revealed new details about the state’s welfare spending, but because the News did not cooperate with the audit, the accountants could not parse out exactly what happened to $40 million the New nonprofit spent. The public still doesn’t know where millions went.
“The State of Mississippi has conducted a through (sic) investigation of the financial and corporate records of the Defendant Nancy New, her Co-Defendant, Zachary New, as well the various corporations in which those defendants hold either ownership or directorship interests or positions in,” the state’s latest motion reads. “…additional involvement of a Hinds County Grand Jury is necessary to address specific instances of potential criminal conduct … which may result in a superceding (sic) indictment.”
Members who voluntarily pay to support nonprofit news keep our reporting free for all Mississippians.

What makes the New case so complicated is the manner in which they kept their books. The News had several bank accounts for each of the family’s ventures — from Mississippi Community Education Center to New Learning Resources, most well known as New Summit School, to New Learning Resources Online to Spectrum Academy and private LLCs, such as 204 Key or Avalon Holdings, which shared a $6 million commercial loan with NLR, documents show. The nonprofit MCEC was the one receiving the welfare funds, but in their accounting, fund sources were co-mingled. Over the last two years, welfare agency officials and the auditor’s office have expressed their difficulty following the money.
“This has become a numbers case,” Nancy New told reporters in November of 2020, before a judge issued the first gag order.
Prosecutors allege the News took welfare money from their nonprofit to make personal investments of over $2 million into a biomedical startup that was trying to develop a new drug to prevent the damaging effects of concussions. The companies, Prevacus and PreSolMD, were started by Florida scientist Jake Vanlandingham. Brett Favre had endorsed and invested in the companies. The former NFL quarterback even hosted meetings at his house with welfare officials and the scientist, during which they came up with the deal.
Vanlandingham promised the News a 2% share “and getting paid regularly,” and Zach New told Vanlandingham to put the stock in the name of N3 LLC, public records show. Vanlandingham told Mississippi Today in 2020 that while he knew the nonprofit was associated with a public grant, he had no idea their money came from the federal welfare program.
You can help power our journalism by joining our member community.
If you found this article informative, please donate.
Central to our mission at Mississippi Today is inspiring civic engagement. We think critically about how we can foster healthy dialogue between people who think differently about government and politics. We believe that conversation — raw, earnest talking and listening to better understand each other — is vital to the future of Mississippi. We encourage you to engage with us and each other on our social media accounts, email our reporters directly or leave a comment for our editor by clicking the button below.
Republish This Story

Republish our articles for free, online or in print, under a Creative Commons license.
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
by Anna Wolfe, Mississippi Today
January 13, 2022
This <a target=”_blank” href=”https://mississippitoday.org/2022/01/13/mississippi-welfare-scandal-new-indictments-nancy-new-zach-new/”>article</a> first appeared on <a target=”_blank” href=”https://mississippitoday.org”>Mississippi Today</a> and is republished here under a Creative Commons license.<img src=”https://i0.wp.com/mississippitoday.org/wp-content/uploads/2021/01/MT_square-thumb.jpg?fit=150%2C150&amp;ssl=1″ style=”width:1em;height:1em;margin-left:10px;”><img id=”republication-tracker-tool-source” src=”https://mississippitoday.org/?republication-pixel=true&post=1021534&ga=UA-75003810-1″ style=”width:1px;height:1px;”>
Anna Wolfe, a native of Tacoma, Wa., is an investigative reporter writing about poverty and economic justice. Before joining the staff at Mississippi Today in September of 2018, Anna worked for three years at Clarion Ledger, Mississippi’s statewide daily newspaper. She also worked as an investigative reporter for the Center for Public Integrity and Jackson Free Press, the capital city’s alternative newsweekly. Anna has received national recognition for her work, including the 2021 Goldsmith Prize for Investigative Reporting, the 2021 Collier Prize for State Government Accountability, the 2021 John Jay/Harry Frank Guggenheim Excellence in Criminal Justice Reporting Award, the 2020 Al Neuharth Innovation in Investigative Journalism Award and the February 2020 Sidney Award for reporting on Mississippi’s debtors prisons. She received the National Press Foundation’s 2020 Poverty and Inequality Award. She also received first place in the regional Green Eyeshade Awards in 2021 for Public Service in Online Journalism and 2020 for Business Reporting, and the local Bill Minor Prize for Investigative Journalism in 2019 and 2018 for reporting on unfair medical billing practices and hunger in the Mississippi Delta.
We believe that an informed Mississippi is a better Mississippi. We center readers in everything we do, informing–and engaging–Mississippians through reporting, podcasts, events and online communities.
Founded in 2016 as the state’s first nonprofit, nonpartisan newsroom, Mississippi Today’s roots in Capitol coverage have grown to encompass a myriad of beats beyond politics and policy, including education, public health, justice, environment, equity, and, yes, sports.
Learn More

By clicking submit, you agree to share your email address with Mississippi Today. We do not sell or share your information with anyone.
a proud member of the
following organizations:

source